ASML, the world-leading Dutch equipment supplier for semiconductor manufacturers, will expand its foothold in South Korea with the planned construction of new facilities and add more capacity with the global chip industry’s growth forecast, the company’s CEO Peter Wennink said Tuesday.
Acknowledging that the global chip industry may struggle in the short term due to worldwide inflation and geopolitical issues, Wennink underlined that more semiconductors are going to be needed to meet rising global demand with the expanding areas of chip applications such as artificial intelligence, automotive innovation and energy transition in the near future.
“The semiconductor market is expected to double in 10 years. To meet the demand, ASML and its partners are adding capacity,” the CEO said in a press conference held a day before the groundbreaking ceremony for ASML’s new Hwaseong campus in Gyeonggi Province.
“Our semiconductor business has a road map in a very close context with our partners in Korea. The road maps with our customers extend beyond 2030,” he added.
Headquartered in Hwaseong, near Samsung Electronics’ semiconductor factory, ASML Korea operates local offices in Cheongju, North Chungcheong Province, as well as Icheon and Pyeongtaek, both Gyeonggi Province, to offer swift responses and services to its major customers in Samsung and SK hynix. The two Korean chip giants account for 30 percent of the Dutch equipment supplier’s worldwide sales.
ASML is the world’s sole supplier of extreme ultraviolet lithography systems, commonly known as EUV machines. As the EUV machines are integral in putting the finest details on the most advanced semiconductors and ASML is capable of only producing 50 of them per year, global chipmakers are constantly vying to secure the shipments.
The Dutch firm is investing 240 billion won ($182 million) in the new Korean facilities, which will include a local repair center and a training center. It is the largest direct investment on foreign soil by the Dutch firm, according to ASML Korea. The construction of the new Hwaseong campus, which will cover about 16,000 square meters, is expected to be completed by the end of 2024.
ASML’s local repair center, once completed, is expected to offer even more responsive services for Samsung Electronics and SK hynix.
“It’s just a beginning. Our business in Korea with our customers will grow significantly,” said Wennink.
The CEO pointed out that ASML will almost double its presence in Korea in the next 10 years, saying ASML Korea plans to hire over 1,400 new employees over the next decade. ASML Korea currently has about 2,000 employees.
He also noted that the company plans to increase the proportion of locally outsourced repair parts from Korean businesses from the current 10 percent to 50 percent.
The CEO left the option of building its own manufacturing facility in Korea open, saying there is always an opportunity to extend from remanufacturing to manufacturing and the company is “at the beginning point” with its Korean businesses.
Regarding the next generational technology of EUV systems, known as high-NA EUV, Wennink said he expects the first shipments to be sent out in 2024 and they will be applied for large scale manufacturing for ASML’s customers by 2026 or 2027.
Asked about the impact of the US export controls against China on the chip industry, he explained that indirect impacts could be as much as 5 percent of total sales. The CEO, however, added that actual influences need to be watched for over the next few months.
The ASML chief’s visit to Korea has prompted speculation that a meeting with Samsung Electronics Chairman Lee Jae-yong is expected. The two have maintained a close relationship as they have known each other for a long time. Neither company confirmed a scheduled sit-down between the two.
